In an unexpected turn of events, French antitrust authorities conducted an unannounced raid at Nvidia’s offices in France on September 28. This action is part of a broader inquiry into the cloud computing sector and its alleged anticompetitive practices. The raid, authorized by a judge, was carried out as part of an investigation into potential anticompetitive practices in the graphics cards sector, but it’s important to note that it does not automatically imply wrongdoing by Nvidia.
The Autorité de la Concurrence, France’s antitrust agency, released a press statement acknowledging the unannounced inspection. The agency referred to concerns about anticompetitive practices within the graphics cards sector, leading to the authorization of the raid. However, the agency emphasized that the raid does not presuppose the existence of a legal breach on Nvidia’s part.
The French antitrust agency’s involvement in the graphics cards sector stems from its year-long study of the cloud computing industry, published in June 2023. While the study primarily focused on major tech companies, including Amazon Web Services (AWS), Google Cloud, and Microsoft Azure, it did not specifically mention Nvidia. The report highlighted the dominant position of these “hyper scalers” in France’s public cloud infrastructure and applications spending, accounting for 80% of growth in 2021.
French authorities concerns over market dominance
According to the Autorité de la Concurrence, Amazon and Microsoft held significant market shares in Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) services in 2021, with 46% and 17%, respectively. The agency expressed concerns about the potential for these tech giants, with their substantial financial resources and digital ecosystems, to stifle competition and hinder the development of a more competitive landscape.
In response to these concerns, the agency is exploring various options provided by national competition laws and the European Data Act to address the perceived dominance of these major players in the cloud computing sector.
Nvidia, known for its role as a global leader in artificial intelligence (AI) chip production, has garnered the attention of regulators not only in France but also in the United States. The company’s unique position as a hardware producer for innovative segments of the digital industry has put it in the spotlight.
Recently, Nvidia faced scrutiny from United States regulators who requested restrictions on the export of AI chips to “some Middle East countries.” However, the United States Department of Commerce swiftly denied these claims, leaving the situation with conflicting reports.
